GASB 44 and State Implementation

Eric S. Berman - Deputy Comptroller Commonwealth of MassachusettsNational Association of State Auditors, Comptrollers and Treasurers

June 14, 2006

Statement 44 – Economic Condition Reporting

• States if part of GFOA CAFR program are 95% there – already doing– Financial trends– Revenue– Debt– Demographic /

Economic– Operations

• Key for states to focus on– OPERATING INFORMATION – why?

• Focus on information that is– Verifiable– Replicable– Tells the story that ‘should be told’

Statement 44 – Economic Condition Reporting

Statement 44 – Economic Condition Reporting

• OPERATING INFORMATION – basic requirements:– By GASB 34 Activity category:

• Number of government employees

• “Indicators” (e.g. performance measures) of the demand of level of service

• “Indicators” of capital asset usage

In other words “YIKES!”

Statement 44 – Economic Condition Reporting

• Operating Items that could be gathered– DOR

• Tax returns transmitted electronically as a % of total

– ANF• Employees covered by benefit plans

– DOC• Counts, new offenders and released

– EHS• Medicaid / Food Stamp Recipients

– Higher Ed• Enrollment and degrees

Statement 44 – Economic Condition Reporting

• Sources of data in addition to the Internet– Internal “metrics” reports for Governor /

Legislature– Bond Official Statements / Annual Updates– Budget documents– Federal grant applications

• Not getting consensus on what an “employee” is or what is the employee’s home agency

• Not agreeing with policymakers / Secretariats up front as to what the key indicators should be for operations

• Think about BLENDED component units

Statement 44 – Economic Condition Reporting – Keys to Success – or lack thereof

• Not footnoting to sources beyond audited financials

• Graphs that portray the wrong message

• Too much data and not enough information

• Inconsistent periods

Statement 44 – Economic Condition Reporting – Keys to Success – or lack thereof